A chilly wind blew over Ukrainian-Western relations last autumn. Kyiv
was accused of covertly selling military equipment to Iraq, and President
Leonid Kuchma received a cold reception at the NATO summit in Prague. But
less than a year later, things appear to be on the mend. Ukraine is committing
some 1,800 troops to peacekeeping efforts in Iraq. It has set its sights
on membership in NATO and the European Union. The World Bank has boosted
slightly the country's credit rating, and the International Monetary Fund
(IMF) also has praised Kyiv's pace on reforms.

But observers say little of substance has actually changed in Ukraine's
political and economic life. Kyiv, they say, is still trying to strike a
delicate balance between Russia and the West.

Roy Allison heads the Russia-Eurasia program at the Royal Institute of
Inter-national Affairs in London. He said any praise from the World Bank
and IMF is worth celebrating, but such remarks can't hide the fact that
Ukraine remains mired in economic inertia and reforms are slow-moving.

"As an environment for significant investment - external investment,
foreign investment - Ukraine does not look very promising. Its political
orientation is not seen as clear in foreign-policy terms. Some of the priorities
are evident, but Kuchma is someone who seems to have lost the trust, I think,
in many senses, of Western partners," Mr. Allison said.

The IMF has generally criticized drawbacks in Ukraine's tax system, as
well as insufficient transparency in its privatization process and an underdeveloped
banking sector. Mr. Allison said Kyiv has made little progress in these
areas, and has made no headway in trying to better position itself to benefit
from the European Union's enlargement in 2004. Concrete economic reforms
in Ukraine, he said, are still a thing of the future.

Marius Vahl, an analyst with the Brussels-based Center for European Studies,
said the government is responsible for the delay in the reform process.
"I mean, they are [conducting reforms] at a rhetorical level,"
he said. "But to a large extent they are not doing it in practical
terms. And of course [the problem is] Kuchma's credibility - [he's] been
saying that he wants to do reforms for many, many years and quite little
has been done, especially compared to most of [Ukraine's] neighbors."

Analysts agree that political instability remains a major obstacle to
real change in Ukraine. The country remains polarized between pro-government
groups and a diverse, sometimes fractious opposition. President Kuchma's
years in office have been marred by a series of political scandals and charges
of serious abuses of power.

On the foreign-policy front, Mr. Kuchma remains attached to Russia -
Ukraine's paternalistic larger neighbor to whom the Ukrainian president
has repeatedly turned when ties with the West have weakened. Mr. Kuchma
is also the current chairman of the CIS Council of Heads of State, something
that brings him further into the Eastern fold.

So why has Mr. Kuchma offered 1,800 Ukrainian troops for peacekeeping
missions in Iraq following a war that Moscow stoutly opposed? Mr. Vahl of
the Center for European Studies said Ukraine is trying to straddle two horses
at once. "This should be seen in the context of the relationship between
Russia, the West and the U.S. And the problem of the Ukrainian multivector
policy - which is the foundation of Ukrainian foreign policy - [is trying]
to do both: opening toward the West and opening toward the East, cooperating
with the East at the same time. When Russia and the West are cooperating
this becomes the natural extension for Ukraine," Mr. Vahl explained.

He said Kyiv, instead of adopting an independent policy of its own, is
largely reactive - adapting its stance to reflect broader changes made by
the West and Russia.

Oleksander Sushko, director of the Center for Peace, Conversion and Foreign
Policy, a Kyiv-based think-tank, told RFE/RL that Ukrainian foreign policy
functions like a pendulum. "We can find tendencies of pro-Western policy
and also the tendencies which have the opposite character. There are no
grounds to say that this tendency will change in the next year," he
said.

Mr. Sushko added that although economic growth may be increasing slightly,
the general situation remains stagnant. "There is no foundation for
a serious breakthrough. Serious changes can take place only when the character
of power is changed, when the system is changed, when the main personalities
leave the political scene. Without that, only cosmetic changes can occur
and these are the changes that are taking place now," Mr. Sushko noted.

Mr. Sushko said next year's presidential elections will be a critical
test for the country. "It will be interesting to see if the authorities
interfere with the election campaign or let it be free and fair. The elections
will show the real direction the country is heading in - not the fact we're
sending peacekeepers to Iraq," Mr. Sushko observed.

President Kuchma completes his second term at the end of 2004, and is
prohibited by the Constitution of Ukraine from seeking a third. Elections
are to be held in October of that year.